Bankruptcy vs. Consumer Proposal

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What are the pros and cons of filing for bankruptcy vs. Consumer Proposal in Canada?

By declaring bankruptcy, you’re protected from creditors and free from most of your debt, but there are disadvantages to consider as well. It can be confusing trying to decide between Bankruptcy vs. Consumer Proposal.

Many of our customers find alternative debt relief options to bankruptcy that they never considered before speaking with us.

In most cases, a Consumer Proposal is the best option, as it has more advantages than personal bankruptcy.

If your income increases after declaring bankruptcy, your monthly payment will also increase.

With a Consumer Proposal, your payments do not change.

Bankruptcy Advantages

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Stay of proceedings

Calls from collection agencies will STOP! Thanks to the Bankruptcy and Insolvency Act, wage garnishments and threats of lawsuits will also stop immediately.

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Cost effective

A personal bankruptcy in Ontario can costs less than other debt relief options. The exact cost depends on your income and assets.

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Quick process

At David Sklar, we’ll make every process easy for you, but personal bankruptcy is a particularly quick process. Many individuals can receive an automatic discharge within nine months.

Bankruptcy Disadvantages

Negative Impact to your credit score

Your credit report will show a record of your bankruptcy claim for six years after discharge and you will lose all of your credit cards.

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Loss of assets

When you file for personal bankruptcy, your licensed Insolvency Trustee will inform you of the assets can keep, and which you will lose. Your Trustee will calculate the value of the equity you have in your home, your investments, and other non-exempt assets, and distribute the proceeds to your creditors. During the bankruptcy period, any tax refunds you may receive will go to your creditors as well.

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Debts that can not be eliminated

Child support, alimony, fines, and some student loans are excluded. Secured debts (such as mortgages) are also not covered in a bankruptcy.

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Impact on employment

You must consider the fact that declaring bankruptcy may have an impact on your employment situation if you are responsible for money or trust funds. While bankrupt, you are not allowed to work as a director of a company.

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Surplus Income

Surplus income is any income earned above the standards set by the Office of the Superintendent of Bankruptcy Canada. You are required to pay half of any surplus income you earn above that amount.

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Added responsibilities

When you claim bankruptcy, you are required to make your regular payments which are based on your income. You must also attend two credit counselling sessions and send a monthly budget statement to your LIT.

Bankruptcy and surplus income payments

Each year the Superintendent of Bankruptcy outlines what they feel is a basic income for different family sizes. When declaring personal bankruptcy your income and size of your family impact the amount you will need to pay and for how long.

Getting into debt is easy. Getting out is a different story.

But it's still possible!

Did you know there is a Canadian debt relief program federally regulated by the Canadian Government, designed to help citizens avoid claiming bankruptcy? This amazing program can only be administered by a Licensed Insolvency Trustee (LIT).

If you’re struggling to make your payments every month and creditors won’t stop calling, we can help.

What our clients are saying.

Based on 830 reviews
Luc Valade
Very processional and understanding of my situation. Thanks to all your team.
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Thomas
Jennifer Norton's exceptional assistance with my consumer proposal was life-changing. Her professionalism, expertise, and dedication were evident from the start. Jennifer's thorough explanations and attention to detail created a tailored proposal that set a clear path to financial freedom. She went above and beyond, advocating for my best interests and providing invaluable support. Thanks to Jennifer, I'm on track to a stress-free financial future. I wholeheartedly recommend her – she's not just a financial expert; she's a life-changer. Thank you, Jennifer!
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Ray Barkley
They made a difficult situation, easy thank you.
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fukinwith doug
I had a great experience with Christine from David Sklar & associates. Very professional, and easy to get through. Thank you
1694804075
Adrian Downey
Great customer service and a smooth process to get your finances on track. Informative and thorough.
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P Bains
From the moment I sat down in the office, I felt welcome and at ease. Grace Cuffaro was both friendly and highly informative. She is extremely knowledgeable and answered all of my questions in detail, making sure I understood before moving on. I was reassured throughout the process that I was making the right decision and that it was not uncommon nor anything to be ashamed of. I didn't expect my appointments to be such positive experiences, but that's exactly what they've been!
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A.L Thompson-Lawrence
I was in a tough financial position and found myself searching for relief. I came across David Sklar & Associates page when doing my research on financial advice. The reviews were amazing, but I was concern because I didn’t know what to expect. I made the decision to set up a consultation and had the pleasure to meet with Jennifer Norton. Right from the beginning, she was attentive, knowledgeable, and pleasant to meet with. The experience was painless and very educational. Jennifer made sure I understood my choices, answered my questions, and concerns promptly, in person, over the phone and via email. I’ve been working with Jennifer for a couple months now and I am pleased that Jennifer is the manager handling my file. I would and have recommend Jennifer Norton, David Sklar & Associates to anyone in need of direction regarding finances.
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Tamas Wint
I had my first meeting with Jennifer, she was really understanding and extremely helpful, and got everything done in a timely manner.
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We are David Sklar

Our team of Licensed Insolvency Trustees in Ontario can help you get out of debt and in control of your own financial future. We’ve helped thousands of people and we can help you too. 

We know this is stressful, but you're not alone.

It’s going to be okay.
Book your free consultation today. We’ll do the rest.

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Book your free consultation.

Call 1-844-962-9200 or fill out the form below. We’ll do the rest.

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